Ryanair hits turbulence, looks to change image

Friday, October 04, 2013 - 02:06

Oct. 4 - A 10 million euro fine for a labour law breach and a rival whose profits just keep on soaring. It's a turbulent time for low-cost carrier Ryanair. Will its promise to overhaul its customer service be enough to get it off the ground again? Ivor Bennett reports.

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It's certainly cheap, but cheerful?
Budget airline Ryanair's made a name for itself as the lowest of the low-cost carriers.
But it's a reputation it no longer wants.
The company's promised to change its culture and improve customer service.
Head of communications Robin Kiely.
SOUNDBITE (English) RYANAIR HEAD OF COMMUNICATIONS ROBIN KIELY, SAYING:
"We've realised we can do things a lot better. We've listened to our customers. Contrary to belief, we do get plenty of compliments but we also get complaints like any company. And we've listened to our customers and tried to roll out a strategy of ways that we can make things easier for them, make things more enjoyable for them."
But this is a company for whom no frills used to be a source of pride.
CEO Michael O'Leary once joked they might even start charging customers to use the toilet.
Branding expert David Haigh says an image change may not be as easy as it sounds.
SOUNDBITE (English) BRAND FINANCE CEO DAVID HAIGH, SAYING:
"They could possibly turn it around but it would take quite a long time. It would take a huge conversion on the road to Damascus for Michael O'Leary and the question really would be, would it be better for him to take a back seat, to put someone else in his place? Or is it possible for him to turn himself around in the public gaze?"
The company disagrees the CEO's the problem.
But either way, a lot needs to be done to change public opinion.
Websites like this show you what many customers think right now.
The company's also just been hit with a 10 million euro fine for breaching labour laws in France.
And with main rival Easyjet soaring even further ahead, it's time for change.
Sam Dobson from Macquarie says the company does have room to manoeuvre.
SOUNDBITE (English) MACQUARIE SENIOR ANALYST, SAM DOBSON, SAYING:
"The unit cost advantage that Ryanair has over Easyjet and other carriers is around 50 percent. So there's a lot of scope there for them to increase marginally their unit cost and maintain their advantage so I do see that happening."
A new booking app is the first part of the overhaul.
And a redesigned website will follow in December.
With an expected 81 million passengers this year, the budget carrier is one of Europe's largest airlines.
But it may take more than just cosmetic changes if it's to grow any bigger.

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